Cheap, Generic 'Biologics' on the Way?

March 8, 2007 -- High-cost drugs like insulin and new-generation rheumatoid
arthritis medications could soon become a lot cheaper. That is, if Congress can
succeed in finding a way to approve them as generics.

The issue could affect a wide range of high-priced drugs and vaccines that
are called "biologics" because they’re produced by living cells under
controlled conditions.

Insulin, a widely-prescribed biologic used by millions of people with
diabetes, can cost patients $1,500 per year. Some newer biologics used to treat
cancer can cost close to $50,000 per year. Rituxan, a biologic that targets
immune cells and treats rheumatoid arthritis and non-Hodgkin's lymphoma, can
cost more than $10,000 per treatment course.

But the FDA has no standard for proving lower-cost generic versions of
biologics equivalent to the parent drugs. That has kept them off the U.S.
market.

Consumer groups and businesses are now calling for a standard that would let
generic companies gain government approval of copies once a brand-name
biologic’s patent expires. Such a standard, they say, could save billions in
health costs.

"This is our single fastest growing category of health costs, and the
trend is simply not sustainable," Sid Banwart, a Caterpillar Inc. vice
president, told a Senate hearing Thursday.

He said the company has spent $150 million on prescription benefits last
year and that spending on biologics went up 45% since 2001.